This series will feature advice on how to build the best team of professionals who will help you with the buying or selling of your Manhattan home. Assemble your Home Team by also reading Part 1: Real Estate Agent and Part 2: Real Estate Attorney.
To find a good mortgage broker for your Home Team, start your search by asking your real estate attorney, real estate agent, or personal network for recommendations of a mortgage specialist: either a mortgage broker or banker with whom they have had a great one-on-one experience. There are three different types of mortgage specialists you can choose from:
- Registered mortgage brokers have relationships with a wide variety of banks and sometimes other lenders. They’re often paid part of what you would normally pay in origination fees, because they provide certain banks/lenders with the initial underwriting/processing for the bank – rather than the bank doing this work in-house.
- Bankers work directly for a bank or lender. They sometimes have limited mortgage and loan products offered by their institutions. Some will offer discount rates or processing fees if you have a relationship with the bank or as an incentive to establish a relationship with them.
- Private bankers sometimes have a bit more leeway on rates and products; in some instances, they can match other offers you have been given. In most cases, a private banker will want you to begin a significant banking relationship with them and/or their financial institution.
In my experience, people prefer to use a banker with whom they have a relationship or they explore a few options to see where they can attain the best possible rate.
Like the rest of the service providers on your “Home Team”, it is important to have a mortgage broker or banker who is pro-active and will follow-through on calls and emails, as no one wants to spend time chasing a mortgage broker, especially when they are responsible for one of the most important elements in a real estate transaction.
A mortgage broker or banker will ask you for detailed financial information and documentation. Many mortgage brokers can issue a pre-approval letter with just your signed financial statement and permission to run your credit report. Having a pre-approval letter early on in the purchase process is something I highly recommend if you plan to finance a purchase. Since a good apartment can attract more than one offer, having the letter or confidence in your ability to get financing can add strength to your offer, making it more competitive. Additionally, check with the mortgage specialists on the time it takes for the bank to issue a commitment letter to you. The commitment letter is the lender/bank’s general commitment to lend to you a certain percentage of the purchase price.
Having a sense of how long it will take for a commitment letter is important for a few reasons:
- In a competitive bidding scenario, the quicker you can attain a commitment letter, the faster you will be able to close. That could be important to you and some sellers.
- If you want a mortgage contingency, most sellers will place a time limit on your ability to attain a commitment for a mortgage, so knowing timing helps here as well.
- If you are buying in a co-op and/or in many condos, a board application will be required, and in most cases, the managing agent will not accept the application until the commitment is received as it is a requirement for the building review of the application.
If you’d like to know more about what to look for in a mortgage specialist or any other recommendations in the buying or selling process, please email me at firstname.lastname@example.org or call 212-937-7011.
All the best–